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Keeping up with market trends

Here Martin Rennie looks at year on year trends in asset pricing. 

As ever, farmers face uncertainty over market prices, the weather and many other factors that affect their business.   

Brexit has not made things easier, and forward planning has become almost impossible. 

Market fluctuations have led several Galbraith clients to look for other income streams to reduce risk to their business. For example, some have entered environmental schemes to add annual management income but also benefit from capital grants for fencing, hard standings and gateways. Others are looking at holiday lets, renewable projects and other diversification opportunities.  

The farm consultancy sector of Galbraith is expanding and we are busy with management work, subsidy advice and undertaking whole farm reviews. If your farming business requires any assistance or is looking to identify an opportunity, please don’t hesitate to contact your local office.

CROPS 

Malting barley prices for 2019 are under increasing pressure because a no-deal Brexit could halt exports to the EU, according to a report in Farmers Weekly. 

Oilseed rape is experiencing an increase in demand, thanks in part to a reduced planting area in the UK compared with last year, although the unsettled weather has left many crops stranded with the heavy rain experienced through August.

SHEEP 

The Lairg sheep sale took place on the 13th of August where the 9,644 wedder lambs sold averaged £52.07 (+£0.96 on 2018), however ewe lambs were some way off 2018 prices with the 3,474 ewe lambs selling for an average of £59.51 (-£17.03 on 2018) (United Auctions, 2019). Scottish sheep meat exports to the EU accounted for 97% of Scottish sheep meat exports by value in 2018, highlighting the significance of a no deal Brexit for the Scottish sheep industry (Press and Journal, 2019). The current deadweight price for lambs as at 27 July 2019 was 340.6p/kg whereas in the previous year it was 380.4p/kg. On a 19.5kg lamb this equates to a drop of £7.76 (10.5% drop

BEEF 

There has been a significant drop in steer prices which mirrors that of the Scottish beef market as a whole. This is partly attributable to a reduction in demand for primary cuts of beef, higher carcase weights increasing production and an increase in Irish cattle slaughtering.  On the 27th July 2019 the deadweight steer price was 340.6 p/kg which is down 36 p/kg compared to the previous year.  The store steer price however is up on the previous year with stores 12-18 months averaging £869/hd on the 3rd August which is up £43/hd on the previous year.

MILK 

The UK average farm-gate milk price for June 2019 was 28.09p/litre, which is up 3.3% on the previous year. As a result of the better weather conditions in the spring, production is up by 2.9% on last year across the UK (AHDB, 2019). With global consumption growing faster than supply UK dairy farms are well placed to make the most of this opportunity (AHDB, 2019d).